Empty pub likely to see business rates value rocket

An empty pub that its community is trying to bring back to life could see its business rates value double, prompting fears for the wider sector.

Although the Dolphin Inn, in Kenton, last served a pint in 2019, the value that is used to calculate business rates is set to double, according to Councillor Alan Connett (Liberal Democrat, Haldon and Exminster).
Cllr Connett said the rateable value for the Dolphin in April 2023 was just £5,000, but from April, will shoot up to £9,000.
While that’s still below the £12,000 rateable value threshold where any occupant would actually need to pay business rates, Cllr Connett said given that business rates are revalued every three years, it could push the pub and many like it into having to pay a bill next time around.
He did not believe the issue was discouraging the community bid to bring the pub back to life, and suggested it might be possible for a legal structure to be found, such as a community interest company or charity, whereby different levels of relief from business rates are available. 
His research shows that another pub breathing a sigh of relief is the Royal Oak in Exminster, whose rateable value looks set to go from £8,750 to dead on £12,000. 
It is only just exempt from business rates this time, said Cllr Connett, alongside those like The Huntsman in Ide and the Seven Stars in Kennford whose rateable values have increased but remain just under the £12,000 level. 
“If not punished by the government this time, then many of our local community pubs will likely be thrashed in the next round of business rate valuations,” said Cllr Connett.
“There’s a triple whammy for many pubs and hospitality businesses because of the cruel jobs tax, high energy prices and now the business rates being hiked.
“If local pubs have not been caught in the business rates net this time, they almost certainly will when it comes round again.”
He added the government was essentially “calling last orders” for many small, local community pubs – “especially those in our rural areas”.
The comments come in the wake of a spate of closures, including in Cllr Connett’s ward.
The Driftwood Inn at Starcross, previously known as The Galleon, announced its closure earlier this month. The Stowey Arms in Exminster has followed suit, as has the Port Royal in Exeter.
Cllr Connett said he believed the Stowey Arms’ rateable value would have risen from £13,100 to £15,500, likely pushing up its business rates bill.
He said he did not know whether rising business rates were a specific factor in the decision by the Stowey Arms to close, but thought it could possibly have been a factor.
The Old Warehouse and The Old Bakery, in South Devon’s Kingsbridge have also announced closures this month but the town’s Wild Artichokes restaurant has successfully changed hands.
In the Budget last year, chancellor Rachel Reeves announced that business ratepayers would pay a lower tax rate than they do now, with the small business multiplier falling to 43.2p (from 49.9p now) and the standard to 48p (from 55.5p now).
The government claimed this would mean more than half of ratepayers would see no bill increase, and almost a quarter (23 per cent) would see bills go down. For the remaining ones who would see an increase, this apparently “reflects many sectors’ post-Covid recovery”.
While a specific relief for retail, hospitality and leisure (RHL) businesses has now been scrapped, the government said lower rates for such businesses would be implemented, meaning the multiplier for small RHL companies would be 38.2p and the standard RHL rate 43p.
Ministers confirmed a support package of £4.3 billion over the next three years, including transitional relief and a small business scheme.
Furthermore, the government said the small business scheme would be expanded to businesses who were eligible for the retail, hospitality and leisure relief.